Missed the bottom? Don’t miss the recovery.
The New York City real estate market ended the second quarter of 2021 on a tremendous high. Supply continues to hold steady. Notwithstanding that pending sales continue to be strong, inventory levels have remained stable as new listings are entering the market as quickly as listings are going into contract. All of this points to a real estate market that has rallied off its Covid lows during the second quarter, generating impressive gains.
In the second quarter, transactions surged 152% from a year earlier, the biggest annual increase in data going back to 1990, according to a report Friday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
The Manhattan real estate market started showing signs of recovery at the end of 2020 and the first six months of 2021 only cemented those trends. If you were waiting for the market to bottom, you missed it. It now is an opportune time to transact as the prices continue to rise from COVID-19 lows. Prices are now back at the 2019 trading ranges.
( Source: https://www.youtube.com/watch?v=nVn7MeP_WT0&t=1s)
The Rebound is Gaining Momentum
The price jumps and shrinking inventory suggest the Manhattan real estate rebound continues to gain momentum, as more families look to trade up to larger apartments and buyers look to take advantage of lower prices and low mortgage rates. Manhattan real estate prices are being boosted as buyers returned to the city and drive demand for the largest, most expensive apartments.
“It’s a sign of the frenzy and intensity of the market,” said Jonathan Miller, CEO of real estate appraisal firm Miller Samuel. “It’s rebounding much faster than most participants expected.”
“With the recent resurgence of the Manhattan housing market, the idea of never-ending optimism and the skill of being oblivious to the way of the world outside NYC should not be lost on us. Die-hard New Yorkers’ (self-included) confidence in the city’s future is something outsiders don’t fully appreciate and yet it is magic. The disconnect on the resilience of the city continues despite being shown over and over again that it’s a real thing.
The Manhattan Sales Market Is Nearly Back (Even Before Office Workers Are)
As it turns out, all the stories on migration, i.e., “fleeing the city” or “exodus,” didn’t understand the math. When looking at population moves, net migration is defined as “inbound versus outbound.” Still, there was little “inbound” in the pandemic because the city was perceived as unsafe and singled out as a global COVID-19 hotspot. In reality, the city didn’t start seeing inbound begin in large numbers until vaccine adoption took hold earlier this year. Even with only 70% of New York State vaccinated, corporations not calling back employees until September, international travel restrictions, home buyers are clearly anticipating a wind-down of the nightmare with bidding wars returning to normal levels and tenants enjoying sharply discounted (but no longer falling) rents.
The NYC budget was made whole, and then some, by federal stimulus, 30-year mortgage rates sitting below 3% and additional billions in economic stimulus will be coursing through the region and count.”
Important note: The last time the Manhattan market peaked was between 2015 – 2018. This was after the rebound of the financial crisis in 2008/2009. The current conditions point to a continuing recovery – see the following UrbanDigs charts:
Days on market is declining.
(Source: UrganDigs)
Median price per square foot is increasing.
(Source: UrganDigs)
Median listing discount is declining.
(Source: UrganDigs)
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